That leave be granted to introduce a Bill entitled an Act to amend the Planning and Development Act 2000 to provide for a specific percentage of lands in a private development to be limited for purchase by first-time buyers and to provide for related matters.
I thank the Leas-Cheann Comhairle. The purpose of this Bill is to prevent the so-called cuckoo funds from crowding out first-time buyers out of the market in town and cities across the country. Home ownership levels have already fallen to 67%, which is well below the EU average of 69%, and is from a high of over 80% in 1991. Our concern is without action, that home ownership rate will fall further behind. This Bill is designed to level the playing field for first-time buyers and keep the dream of home ownership alive by earmarking a specific amount of units per development for first-time buyers. The Bill still allows specific build-to-rent in appropriate places but prevents already-built developments from being sold in bulk to one purchaser. This means developments that boost supply are encouraged but purchases that simply swoop in on existing developments would be banned.
Real estate investment trusts, REITs in the private rented sector, PRS, are a small but rapidly expanding part of the housing sector. Additional supply is welcome but there have been numerous cases in which already-built developments have been bought entirely by one fund. This is crowding out first time buyers and risks changing the character of areas of this country.
Home ownership is already under pressure with ownership rates in Ireland at their lowest level in half a century and below the EU average. My party, Fianna Fáil, supports home ownership and we believe it is an honest and just aspiration for people to have. We need affordable housing for working people, both on the rental and purchasing side.
When we look at home ownership rates, we see that other countries that are mentioned often such as Germany and Austria have expanded ownership levels while Ireland is going in the other direction.
This Bill aims to protect first-time buyers from undue competition by massive investment funds they cannot hope to match on the open market. The Bill also ensures that renting is considered as part of overall local housing strategies. This will help ensure balanced communities where different tenure types are available rather than concentrating rent-only in particular areas while excluding first-time buyers.
This Bill will allow local authorities to earmark a certain percentage of zoned land, up to 30% at the discretion of the local authority, for first-time buyers. It will operate on a similar basis to the current Part V provisions, which ensure that 10% of units are set aside for social housing. For example, a development of ten units must have up to three units available for first time buyers to purchase. Importantly, each local authority must also review its housing strategy to set out its requirements for rental units over the lifetime of its own housing plan. This will ensure a full picture of the housing market is considered when the council sets out its future plans.
The goal of the Bill is to prevent the bulk-buying of entire developments by investment funds, thereby freezing out first-time buyers. It contains exemptions to allow build-to-rent developments that would otherwise not be built to go ahead as part of an overall housing strategy agreed by each local authority, while preventing developments already in place being snapped up by investors at the last moment.
This way, investment in new built-to-rent will be allowed at the discretion of the local authority or indeed an Bord Pleanála but they must be earmarked for rental only as part of an overall housing plan adopted at each local authority level. We believe that action must be taken at this level. Last year, 18,000 homes were built according to the Department's own figures. Nearly 3,000 were purchased by so-called cuckoo funds and the PRS. On the other side, nearly 3,000 were also purchased by the State. On the State side, we need to build more public housing and it needs to get involved. We also need to also protect and encourage those who wish to buy their own homes, particularly first-time buyers. I and my party believe that this Bill will go a long way towards levelling the playing pitch for them.